Gasoline prices head higher while motorists panic

A "Sorry out of Service" sign is placed on one of the gas pumps at a gas station in Athens, Ga., on Friday, Sept. 1, 2017. Gasoline prices in the U.S. have risen to new high amid continuing fears of shortages in Texas and other states after Hurricane Harvey's strike. (Joshua L. Jones/Athens Banner-Herald via AP)

DALLAS — The spike in gasoline prices in the aftermath of Hurricane Harvey has hit the accelerator.

The national average for regular was $2.56 a gallon by late Friday afternoon, an increase of 20 cents in the last week, according to GasBuddy.

Prices jumped at least 10 cents a gallon in 24 hours in Texas, Ohio, Georgia and the Mid-Atlantic states, travel club AAA reported.

The nationwide average was already higher than most experts had given as a worst-case scenario when flooding from the devastating storm began knocking out refineries along the Texas Gulf Coast a week ago.

Two of the leading price-forecasting analysts, GasBuddy’s Patrick DeHaan and Tom Kloza of the Oil Price Information Service, now see the national average peaking as high as $2.75 a gallon in the next few days.

Many stations in the Dallas area were out of gas Friday, and those that had it were often charging more than $3 a gallon — and drawing long lines of desperate drivers.

Texas Gov. Greg Abbott tried to reassure drivers that there is plenty of gasoline.

“Don’t worry, we will not run out,” Abbott said, “and we will be back into our normal pattern before you know it.”

The analysts said interruptions in supply were isolated and lines were largely the result of people rushing out to top off their tanks. DeHaan said only one rack, or wholesale gasoline terminal, out of the six in the Dallas area was dry.

“There is enough gas out there,” he said. “It’s just a matter of getting it to the right places before motorists panic.”

Valero Energy, a major refiner for the Texas market, said it was shipping only slightly reduced volumes to major cities in the state, although deliveries in Houston were still hampered by flooding.

Long lines could pop up next in the Southeastern and Eastern states, as far north as New York, which get much of their gasoline from the Colonial Pipeline that taps into refineries in Texas and Louisiana. The operator doesn’t expect the pipeline to resume normal operations until Sunday. On top of that, analysts said some gasoline from the Northeast is being diverted to Florida, and gasoline exports are contributing to the higher prices.

The U.S. now exports large amounts of gasoline, especially to Mexico and other parts of Latin America, and buyers there are competing with domestic distributors and bidding up prices.

How long this lasts will depend on how quickly the Gulf Coast refineries are back in business, especially the giants like Motiva’s Port Arthur, Texas, plant and the Exxon Mobil refinery in Baytown, near Houston.

One Chevron station in downtown Dallas that was selling regular for $2.29 a gallon before Harvey bumped up its price to $2.99 on Thursday, and a nearby Shell station was asking $3.97.

QuikTrip, one of the nation’s largest convenience store chains, temporarily halted gasoline sales at about half its 135 stores in the Dallas-Fort Worth area to send the fuel to a few designated stores across the area, said company spokesman Mike Thornbrugh.

Ten Texas refineries remained shut down Friday and another 10 were running at reduced rates or restarting, according to the Energy Department. About 4 million barrels per day of refining capacity was shut down — more than one-fifth of the nation’s supply. Some of that supply is expected to return within a week.

Spiro Dounis, an energy analyst with UBS, said it could take three months for the industry to produce at normal rates based on the experience after Hurricane Katrina in 2005.

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Paul Weber in Austin, Texas, and Claudia Lauer in Dallas contributed to this report.